[30] Financial liabilities

As at December 31, 2020, non-current and current financial liabilities essentially comprised promissory notes and the issued corporate bond. Financial liabilities as at the reporting date break down as follows:

Promissory notes

As at December 31, 2020, the total nominal amount of the issued promissory notes was €584.0 million (December 31, 2019: €1,310.0 million). The promissory notes maturing in 2022, 2024, 2025, 2026, and 2027 have fixed and variable interest rates (Euribor + margin), The variable-rate tranches of the promissory note that matures in 2022 and has a nominal value of €653.5 million were repaid ahead of schedule on October 30, 2020. There was also an early partial repayment, in a nominal amount of €72.5 million, on December 22, 2020 on the promissory note that matures in 2026. The following table shows the nominal amounts of the promissory notes issued by KION GROUP AG:

KION GROUP AG has entered into interest-rate derivatives in order to hedge the interest-rate risk resulting from the variable-rate and fixed-rate tranches. Some of these derivatives are recognized as cash flow hedges or fair value hedges in accordance with IFRS 9 (see note [42]).

The promissory notes are not collateralized. KION GROUP AG is the borrower in respect of all the payment obligations resulting from the promissory notes.

Corporate bond

In September 2020, KION GROUP AG launched a corporate bond program (EMTN program) with a total volume of up to €3 billion. The first bond placed on the capital markets under this program had a total volume of €500.0 million, a maturity date in 2025, and a coupon of 1.625 percent. The bond was unsecured and issued at a price of 99.407 percent. The transaction costs of €2.9 million attributable to the corporate bond have been deducted from the carrying amount and will be recognized over the term of the corporate bond.

Liabilities to banks

Liabilities to banks decreased by €421.3 million year on year. This was mainly due to the early repayment of the outstanding liability of €200.0 million under the acquisition facilities agreement (AFA) in January 2020 and the early repayment in December 2020 of the fixed-interest loan of €200.0 million that had been taken out in 2019.

KION GROUP AG has a revolving credit facility of €1,150.0 million. This has a variable interest rate (Euribor + margin) and can be drawn down until February 2023. The drawdowns under the credit facility are generally classified as short term. As at December 31, 2020, there were no drawdowns from the revolving credit facility, as had also been the case in the prior year.

In May 2020, KION GROUP AG reached agreement with its core group of banks on the provision of a syndicated liquidity line, with Kreditanstalt für Wiederaufbau (KfW, Germany’s state-owned development bank) taking a leading role. The liquidity line, which had a volume of €1.0 billion and a term of twelve months, was terminated with effect from December 15, 2020. The commitment fees and transaction costs of €7.7 million attributable to the liquidity line were recognized in financial income/expenses.

The liabilities to banks are not collateralized. KION GROUP AG has issued guarantees to the banks for all of the payment obligations.

Other financial liabilities

In November 2019, KION GROUP AG launched a commercial paper program with a maximum program volume of €500.0 million. No commercial paper had been issued as at December 31, 2020, as was also the case as at December 31, 2019.

Covenants

Certain loans and promissory notes taken out by KION GROUP AG stipulate adherence to covenants. The agreed financial covenant involves ongoing testing of adherence to a defined maximum level of leverage. Less favorable interest terms may be imposed if this level of leverage is increased. Exceeding the maximum level of leverage as at a particular reference date may give lenders a right of termination. In May 2020, the financial covenant in respect of the current credit facility and the additional, now terminated liquidity line was temporarily suspended as agreed with the banks providing the funding. This suspension was still in effect at the reporting date.